Popeyes Iowa Franchise Lawsuit: Settlement Terms and Covered Locations

The Popeyes Iowa franchise lawsuit ended in a December 2025 settlement that requires franchisee Asif Poonja to sell all seven of his Iowa Popeyes restaurants, plus one under construction in Iowa City, to Popeyes-approved buyers by June 30, 2026. Popeyes Louisiana Kitchen had sued Poonja in September 2025 after he kept operating the restaurants under the Popeyes name following the termination of his franchise agreements over food safety and brand standard violations.¹²

Why Popeyes Terminated the Franchise Agreements

The terminations followed a year of formal warnings. Popeyes issued its first default notice in October 2024 to the Cedar Rapids store on East Avenue, then followed with more notices at Coralville in May and June 2025 and a second notice at Cedar Rapids that same June. Each notice cited failures to meet Popeyes’ food safety and brand compliance standards.³⁴

All five original locations then failed follow-up inspections in August 2025. On August 29, 2025, Popeyes issued Notices of Default and Termination to each of the five Jam Equities entities, ending their franchise agreements. The restaurants stayed open anyway, still using Popeyes signage, menu boards, uniforms, and packaging.²

The Lawsuit

Popeyes filed suit on September 5, 2025, in the U.S. District Court for the Southern District of Florida (Case No. 1:25-cv-24066-JB), naming Poonja personally along with five Jam Equities entities covering the Coralville, Cedar Rapids East Avenue, Waterloo, Dubuque, and Merle Hay Road Des Moines locations.²

The complaint alleged trademark infringement under Sections 32 and 43(a) of the Lanham Act, breach of the franchise agreements and Poonja’s personal guarantees, and common-law unfair competition. Popeyes argued the continued use of its branding created consumer confusion and risked “irreparable harm” because customers would assume they were eating at a corporate-sanctioned restaurant with quality oversight in place.²³ Along with injunctive relief, the company sought an accounting of profits from unauthorized operations, compensatory damages, potential treble damages under Section 35 of the Lanham Act, attorneys’ fees, and enforcement of a two-year, 10-mile non-compete against Poonja.

On November 4, 2025, Popeyes filed an amended complaint adding two more restaurants: a second Des Moines location on SE 14th Street and a second Cedar Rapids location on Blairs Ferry Road NE. The SE 14th Street store had failed a food safety inspection in October 2025, and its license was terminated on November 4, the same day the amended complaint was filed. It also stayed open.⁵⁶

What the Settlement Requires

The parties filed a settlement agreement on December 1, 2025, and the court dismissed the case two days later.¹

Jam Equities must sell all seven Iowa locations, plus the Iowa City restaurant under construction, to buyers who are already Popeyes franchisees or who qualify to become franchisees. The restaurants may continue operating under a temporary license through June 30, 2026, while sales are arranged.¹⁷

Jam Equities must pay Popeyes “the full amount of all sums due and owing,” including attorneys’ fees. If the sale proceeds don’t cover the amount owed, Poonja is personally liable for the difference under the personal guarantees he signed for each franchise agreement. He must also turn over financial and operational records to help the transfers move forward. Popeyes kept the right to return to court if Jam Equities doesn’t comply.¹

Restaurants Covered by the Settlement

Seven operating Iowa locations are covered:

Coralville: 740 Coral Ridge Avenue
Cedar Rapids (East Avenue): 3401 E Avenue NW
Cedar Rapids (Blairs Ferry): 370 Blairs Ferry Road NE
Waterloo: 4015 Lowes Boulevard
Dubuque: 4825 Asbury Road
Des Moines (Merle Hay): 4140 Merle Hay Road
Des Moines (SE 14th): 6230 SE 14th Street

An eighth Popeyes location under construction at 1926 Keokuk Street in Iowa City, associated with Jam Investments of Iowa City, LLC, is also part of the deal.⁷ A separate Altoona location at 3831 8th Street was not part of the federal lawsuit but was subject to a state tax enforcement action.⁶

Unpaid Taxes and Worker Pay Complaints

Poonja’s problems in Iowa reached beyond the Popeyes case. The Iowa Department of Revenue sought $955,000 in unpaid sales and use taxes, penalties, and interest across four locations, with debts dating to 2022. The Altoona store alone owed $261,000. The state obtained distress warrants and orders to garnish payments and seize funds.⁶⁸

Workers reported ongoing pay problems. Tayanna Grant, a Cedar Rapids employee, said her paycheck bounced and pushed her bank account negative. Marlow Burrell, who worked in Coralville, said he was underpaid by $700 and fired after speaking to the media, and he filed a wage claim. Staff at the Waterloo restaurant walked out over missed pay and temporarily shut the store. Poonja told KCRG the payment issues “have been fixed” but did not say what caused them.⁹

1
Des Moines Register. Popeyes Iowa Restaurants Settlement
2
WHO13. Popeyes Louisiana Kitchen v. Poonja, Complaint
3
Corridor Business Journal. Popeyes Sues Iowa Franchisee for Continuing Operations After Franchise Termination
4
Nation’s Restaurant News. Popeyes Sues Former Franchisee for Trademark Violations
5
Des Moines Register. Des Moines Popeyes Lawsuit Adds Two Stores
6
KCRG. Popeyes Nears Agreement With Rogue Iowa Franchisee
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KCRG. Popeyes Franchise Owner Settles Lawsuit Amid Employee Payment Concerns
8
Yahoo News. Popeyes Owner Sued Over Misusing Brand
9
KCRG. Popeyes Franchise Workers Report Ongoing Payment Issues